The
origins of Volkswagen date back to 1930s Nazi
Germany, and the project to build the car
that would become known as the Beetle. Hitler's
desire that almost anybody should be able
to afford a car coincided with a proposal
by car designer Ferdinand Porsche (1875-1952)
-- although much of this design was inspired
by the advanced Tatra cars of Hans Ledwinka.

The intention was that ordinary Germans would
buy the car by means of a savings scheme,
which around 336,000 people eventually paid
into.
Prototypes of the car called the KdF-Wagen
(German: Kraft durch Freude = strength through
joy), appeared from 1936 onwards (the first
cars had been produced in Stuttgart).

The car already had its distinctive round
shape and air-cooled, flat-four, rear-mounted
engine, features similar to the Tatra. Erwin
Komenda, the longstanding Porsche chief designer,
developed the car body of the prototype, which
was recognizably the Beetle we know today.

The new factory in the new town of KdF-Stadt,
now called Wolfsburg, purpose-built for the
factory workers, had only produced a handful
of cars by the time war started in 1939. Consequently
the first volume-produced versions of the
car were military vehicles, the jeep-like
Kübelwagen and the amphibious Schwimmwagen.

The company owes its postwar existence largely
to one man, British army officer Major Ivan
Hirst (1916-2000). In April 1945 KdF-Stadt
and its heavily bombed factory were captured
by the Americans, and handed to the British
to administer. The factory was placed under
the control of Hirst.

At first the plan was to use it for military
vehicle maintenance. Since it had been used
for military production, and had been a "political
animal" (Hirst's words) rather than a commercial
enterprise, the equipment was in time intended
to be salvaged as war reparations.

Hirst painted
one of the factory's cars green and demonstrated
it to British army headquarters. Short of
light transport, in September 1945 the British
army was persuaded to place a vital order
for 20,000.

The first few hundred cars went to personnel
from the occupying forces, and to the German
Post Office.

By 1946 the factory was producing
1000 cars a month, a remarkable feat considering
the factory was still in disrepair: the damaged
roof and windows meant rain stopped production;
the steel to make the cars had to be bartered
with new vehicles.

The car and its town changed
their Second World War-era names to Volkswagen
and Wolfsburg respectively, and production
was increasing. It was still unclear what was to become of
the factory. It was offered to representatives
from the British, American and French motor
industries. Famously, all rejected it.

After
an inspection of the plant Sir William Rootes,
head of the British Rootes Group, told Hirst
the project would fail within two years, and
that the car "is quite unattractive to the
average motorcar buyer, is too ugly and too
noisy ... "If you think you're going to build
cars in this place, you're a bloody fool,
young man."

In a bizarre twist of fate, Volkswagen
would manufacture a locally built version
of Rootes' Hillman Avenger in Argentina in
the 1980s, long after Rootes went bust at
the hands of Chrysler in 1978 - the Beetle
outliving the Coventry-based concern by over
30 years!

Heinrich Nordhoff (1899-1968), a former senior
manager at Opel who had overseen civilian
and military vehicle production in the 1930s
and 1940s, was recruited to run the factory
in 1948.

In 1949 Hirst left the company, now
re-formed as a trust controlled by the West
German government. Apart from the introduction
of the "Type 2" commercial vehicle (van, pickup
and camper) and the Karmann Ghia sports car,
Nordhoff pursued the one-model policy until
shortly before his death in 1968.

Production of the "Type 1" VW Beetle (German:
'Käfer', US: 'Bug', French: 'Coccinelle',
Brazil: 'Fusca') increased dramatically over
the years, the total reaching 1 million in
1954. During the 1960s and early 1970s, although
the car was becoming out-dated, American exports,
innovative advertising and a growing reputation
for reliability helped production figures
to surpass the levels of the previous record
holder, the Ford Model T. By 1973 total production
was over 16 million.

VW expanded their product line in 1967 with
the introduction of several "Type 3" models,
which were essentially body style variations
(Fastback, Notchback, Squareback) based on
"Type 1" mechanical underpinnings, and again
in 1969 with the relatively unpopular "Type
4" (also known as "411" and "412") models,
which differed substantially from previous
models with the notable introduction of Unibody
construction, a fully automatic transmission
and fuel injection.

The Type 3 and Type 4 models had been a comparative
flop, and the NSU-based K70 also failed to
woo buyers. The company knew that Beetle production
had to end one day, but the conundrum of replacing
it had been a never ending nightmare.

The
key to the problem was the 1964 acquisition
of Audi/Auto-Union. The Ingolstadt based firm
had the necessary expertise in front wheel
drive and watercooled engines that VW so desperately
needed to produce a credible Beetle successor.

Audi influence paved the way for this new
generation of Volkswagens, known as the Polo,
Golf and Passat. Production of the Beetle
at the Wolfsburg factory switched to the VW
Golf in 1974, marketed in the United States
as the VW Rabbit in the 1970's and 1980's.

This
was a car unlike its predecessor in most significant
ways, both mechanically as well as visually
(its angular styling was designed by the Italian
Giorgetto Giugiaro). Its design followed trends
for small family cars set by the 1959 Mini
and 1972 Renault 5 -- the Golf had a transversely
mounted, water-cooled engine in the front,
driving the front wheels, and had a hatch-back,
a format that has dominated the market segment
ever since.

Beetle production continued in smaller numbers
at other German factories until 1978, but
mainstream production shifted to Brazil and
Mexico.

Since the introduction of the Golf, VW has
offered a range of models much like other
large European car-makers. The Polo, a smaller
car introduced around the same time as the
Golf, the coupés Scirocco and Corrado, and
the larger Passat saloon have been the most
significant. In 1998 VW launched the New Beetle,
a "retro"-themed car with a resemblance to
the original Beetle but based on the Golf
-- this has been popular in the USA but less
so in Europe.

In 2002 VW announced two models taking it
into market segments new to the company: the
Phaeton luxury saloon, and the Touareg sports-utility
vehicle. Like its competitors, the Mini and
the Citroën 2CV, the original-shape Beetle
long outlasted predictions of its lifespan.

More so than those cars, it maintains a very
strong following worldwide, being regarded
as something of a "cult" car since its 1960s
association with the hippie movement.

By 2002 there had been over 21 million produced.
On July 21, 2003, the last old-style Volkswagen
Beetle rolled of its production line in Puebla,
Mexico. It was car number 21,529,464 of the
model, and was immediately shipped off to
the company's museum in Wolfsburg, Germany.
In true Mexican fashion, a mariachi band serenaded
the last car in the 68-year-old history. The
last car was nicknamed El Rey, which is Spanish
for "The King".

The company has had a close relationship with
Porsche, the Stuttgart-based sportscar manufacturer
founded in 1947 by Ferry Porsche, son of the
original Volkswagen designer Ferdinand Porsche.
The first Porsche cars, the 1948 Porsche 356,
used many Volkswagen components including
a tuned engine, gearbox and suspension. Later
collaborations include the 1969/1970 VW-Porsche
914, the 1976 Porsche 924 (which used many
Audi components and was built at an Audi factory),
and the 2002 Porsche Cayenne (which shares
engineering with the VW Touareg).

In 1992 leadership of the Volkswagen Group
went to Ferdinand Piëch, grandson of Ferdinand
Porsche. In 2002 former BMW head Bernd Pietschesrieder
took over[1] (http://news.bbc.co.uk/2/hi/business/4034975.stm).
Volkswagen is part of the Volkswagen group
(VAG), along with:

Audi - (the former post-WWII
Auto Union/DKW) which was bought from Daimler-Benz
in 1964-1966

NSU - bought in 1969 by
Volkswagen's Audi division, a brand not
used since 1977

SEAT - majority owned since
1987

Skoda - bought in 1991

Bentley - bought in 1998
from Vickers along with Rolls-Royce

Bugatti - name bought in
1998

Lamborghini - bought in
1998 From July 1998 until December 2002

VW's Bentley division also
sold cars under the Rolls-Royce name under
an agreement with BMW, which had bought
the rights to that name. From 2003, only
BMW may make cars called Rolls-Royce